City Budget Showdown Produces Smoke, No Fire

August 18, 1989|by DAN HARTZELL, The Morning Call

The great budget showdown occurred in Bethlehem Town Hall last night, but when the smoke cleared, all parties remained standing.

At issue is whether the city budget is floundering toward a deficit, as mayoral candidate Paul Marcincin believes, or whether incumbent Mayor Ken Smith is scouting a steady course toward fiscal responsibility and a financially sound 1990.

Council also heard the administration's major recommendations on implementing next year's recycling collection program.

Marcincin, the Democratic nominee for mayor in the November election, has charged that the city will wind up as much as $2 million in the red at year's end, because of an estimated $1 million landfill revenue shortfall, a $470,000 deficit from the failed regional incinerator project, and other budget gaps. Marcincin attended the meeting last night.

Smith, the Republican incumbent, counters that while some revenue shortfalls will be realized during 1989, they will be nearly balanced by income from other areas that is greater than expected.

Last night's workshop session review of the budget was scheduled, council President Jack Lawrence noted, not to indulge in politics, but rather to check on the city's financial status. In addition to two mayoral candidates, all eight candidates for three available council seats, including the three incumbents, also attended.

Democratic Councilman James Delgrosso predicted a $335,000 deficit for 1989. Councilman George Karabin pointed out that the figure did not include the $500,000 cash balance with which the city started 1989. Including it would result in a cash balance of about $165,000, Karabin said.

Delgrosso's projection included about a $1.3 million shortfall of anticipated revenue, versus some $994,000 in income which will be higher than the budget predicts.

Budget Director Dennis Reichard, presenting the administration's point of view using certain actual income and spending figures through June 30, but still relying on predictions for the rest of the year, presented surprisingly similar figures.

Reichard foresees a landfill shortfall of about $800,000 - the same as Delgrosso's, though the councilman said that would be his "low end" figure and it could easily reach $1 million.

Reichard also included the set $470,000 on advance incinerator costs which will not be recouped because of the project's demise in January.

Reichard and Delgrosso also agreed on higher-than-anticipated earned income tax revenue, $500,000 more than budgeted, and were close in other areas, such as savings on worker's compensation premium payments, $185,000 versus $155,000 over budget, respectively.

Reichard included the $500,000 beginning cash balance. His estimated shortfall total, $1.27 million, was exceeded by his added-revenue total, $1.57 million, resulting in his prediction of the "carryover" to 1990: $300,000. That's a difference of only $135,000 compared to the Delgrosso-Karabin number.

Much discussion centered on how the calculations were made, who was being overly optimistic or pessimistic, and what accounting methods had been used.

But the net result appeared to be that any clearing smoke resulted from puffing on the peace pipe, rather than the salvos that might have been expected.

On the advice of his campaign adviser, attorney Jay Leeson, Marcincin declined comment after the meeting, saying he would have a formal statement on the budget issue in the future.

Smith said he felt his budget projections had, on the whole, been vindicated.

Reichard stressed that everybody's figures still rely heavily on the crystal ball approach, and that the picture will be a lot clearer by October or so. "The future is still ahead of us here," he said.

On the recycling issue, Health Director Glen Cooper, who also chairs the city's Solid Waste Advisory Committee, outlined the committee's recommendations for the state-mandated recycling collection program, set to begin Feb. 1.

Once per week collections, or at the least, pickups every other week, are recommended, with unseparated glass, cans, and certain plastics. Newspapers would not be collected, but would be accepted at the city's dropoff recycling center on Illicks Mill Road.

Recycling storage containers will be provided for free to city residents, if the committee's recommendations are adopted by council.

There was some sentiment on council to include newspapers in the collection program.

Cooper said that while the actual cost of collection should be approximately balanced by the cost-avoidance factor in landfill dumping fees, that on the whole, recycling will cost the city money.

"Recycling is going to cost money, there's no doubt about it," he said.

Cooper said the administration and council would have to decide how to pay for the program. In a rough estimate, Cooper figures the program would cost about $4.50 per quarter, per household, though any trash disposal cost avoidance for the resident is not included in that figure. One suggestion would be to add a charge to the water bills, Cooper said.